A value proposition is an essential element in any business plan. It describes what makes our product or service different from the competition and why customers should choose our business over others. Throughout this blog, you will learn what a value proposition is in much greater detail and get step-by-step tips on creating one.
- What is the meaning of the value proposition?
- The importance of the value proposition in companies
- Step by step on how to create your value proposition
What is the meaning of the value proposition?
When we refer to the value proposition, we commonly refer to a paragraph that defines what my product, service, or business does, what gives value, and why it is valuable to my customers. It is a statement that helps potential customers understand the importance of what our business offers and why they should select us over other offerings in the marketplace.
It is a clear, direct, concise, and objective statement of the benefits the business provides. A strong value proposition is characterized by the following:
- It is specific: your goal is to focus on the benefits your target customers will receive.
- It touches on pain points: Our potential customers will know that with our product or service, they will be able to solve their problems, alleviate pain and thus improve their daily lives.
- It is exclusive: it is directed to a segment of target customers and is distinguished for being different.
Once established, it is a vital instrument for developing marketing strategies. It introduces our business and defines the scope so that the public knows what to expect from our products or services, how it works, and the company's purpose in the market.
The value proposition can be built on a canvas, which is then integrated into the nine pillars of the business model.
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This visual representation helps the teams capture the ideas, introspect the business, analyze and study their customers and thus establish a value proposition according to the direction the company has to look for.
The importance of the value proposition in companies
Some of the reasons why it is necessary to establish a value proposition and dedicate some space to this exercise to dynamize your business can be seen in the following points:
- Guarantee the path to success and how to face crises by being clear about what we offer, positioning the business brand in the market, and implementing credibility.
- Frame the value differentiator that our business can provide. Knowing what distinguishes us, what makes us unique, and why we prevail over the competition.
- It helps to understand and listen to our customers. Keep our customers' pains at the forefront, and provide a clear and straightforward message to alleviate/solve their problems.
- Demonstrate qualities and virtues to potential prospects. Not only to give a first approach but also to increase the possibilities that they acquire our products or services.
These reasons are an anteroom to gather the team and create the value proposition on a canvas. If your company has one, reviewing it and knowing it fits today's needs is essential. In the section below, I will tell you which aspects are vital to creating the value proposition for your business.
Step by step on how to create your value proposition
With a multidisciplinary team, holding work sessions to build a value proposition on a canvas is necessary. Take sheets of paper, post-it notes, whiteboards, and all the material that helps to bring out the creativity in your team will be welcome to write down and analyze the ideas.
Based on what Alexander Osterwalder conceived, I will explain what it consists of and how to fill it, pretending to help in a clearer and more profound way the critical aspects within a business model.
I explain each of the crucial elements to consider so that you can discuss, contemplate, analyze and study the points found in various sessions; this is a reference that allows us to ensure a balance between the product and the market. In the image below, you can see what this canvas looks like.
The intention is that, together with the team, each numbered image is developed, starting on the right (circle), which is the customer profile, and then on the left side (square), which makes up the value map.
- Jobs to be done: these are the activities that the user needs to do right now, that they do to solve their needs. Identify whether these to-dos are functional, social, or emotional.
- Expectations or desires: Refers to the benefits and happy moments the user wants.
- Needs or frustrations: are those situations the user wants to avoid at all costs.
- Products and services: The list of products and services that satisfy customer needs.
- Satisfaction generators: The benefits and expectations generated by the products and services.
- Relief generators: How the product or service alleviates the user's difficulties.
Once we are clear about the activities performed by the user, we can determine which products or services are helpful to them. In addition, if we know the desires and frustrations that users expect, we can innovate and design solutions with particularities that provide more significant relief.
This tool is clear, accessible, and presented in a visual way that helps to understand and capture the ideas for the teams that are integrated by different areas of a company.
This article highlights how a good value proposition can unite customer loyalty, boosting our business in the market and leading to higher sales. It is an advantage that will give us superiority over the competition, so I invite you to make your company's value proposition or, if necessary, take a break and review the one that currently exists. If you have any doubts or want support on this topic, you can contact Imagineer's Strategy team, who will be willing to listen to you.